RELIANCE CAPITAL ASSET MANAGEMENT LIMITED ANNUAL REPORT

Transcription

1 RELIANCE CAPITAL ASSET MANAGEMENT LIMITED ANNUAL REPORT

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18 Independent Auditor s report To the Members of Reliance Capital Asset Management Limited Report on the financial statements We have audited the accompanying financial statements of Reliance Capital Asset Management Limited ( the Company ), which comprise the balance sheet as at 31 March 2014, the statement of profit and loss and the cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Management s responsibility for the financial statements Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ( the Act ). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give true and fair view and are free from material misstatement, whether due to fraud or error. Auditor s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

19 Independent Auditor s report (Continued) Reliance Capital Asset Management Limited Opinion In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i. in the case of balance sheet, of the state of affairs of the Company as at 31 March 2014; ii. in the case of the statement of profit and loss, of the profit for the year ended on that date; and iii. in the case of cash flow statement, of the cash flows for the year ended on that date. Report on Other Legal and Regulatory Requirements As required by the Companies (Auditor s Report) Order, 2003 ( the Order ) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order. As required by section 227(3) of the Act, we report that: a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit; b) in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books; c) the balance sheet, statement of profit and loss, and cash flow statement dealt with by this report are in agreement with the books of account; d) in our opinion, the balance sheet, statement of profit and loss, and cash flow statement dealth with by this report comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Act; e) on the basis of written representations received from the directors as on 31 March 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, For B S R & Co. LLP Chartered Accountants Firm s Registration No: W Milind Ranade 28 April 2014 Partner Mumbai Membership No:

20 Annexure to the Independent Auditor s Report 31 March 2014 (Referred to in our report of even date) i. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) (c) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification. Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concern assumption. ii. iii. iv. The Company is a service company, primarily rendering investment management services to Reliance Mutual Fund and portfolio management services to its customers. Accordingly, it does not hold any physical inventories. Thus, paragraph 4 (ii) of the Order is not applicable. According to the information and explanations given to us, the Company has neither granted nor taken any loans, secured or unsecured to or from, any companies, firms or other parties covered in the register maintained under section 301 of the Act. In our opinion, and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and nature of its business with regards to purchase of fixed assets and with regards to the sale of services. The activities of the Company do not involve the purchase of inventory and sale of goods. We have not observed any major weakness in the internal control system during the course of the audit. v. In our opinion, and according to the information and explanations given to us, there are no contracts and arrangements the particulars of which need to be entered into the register maintained under section 301 of the Companies Act, vi. vii. viii. The Company has not accepted any deposits from the public. Accordingly paragraph 4(vi) is not applicable. In our opinion, the Company has an internal audit system commensurate with its size and the nature of its business. The Central Government has not prescribed the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 for any of the services rendered by the Company.

21 Annexure to the Independent Auditor s Report 31 March 2014 (Referred to in our report of even date) ix. (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has been generally regular in depositing undisputed statutory dues including Income Tax, Service Tax, Provident Fund, Wealth Tax and other material statutory dues during the year with the appropriate authorities. As explained to us the Company did not have any dues on account of Investor Education and Protection Fund, Excise Duty and Customs Duty. ix. (b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income-tax, wealth tax, service tax and other material statutory dues were in arrears as at 31 March 2014 for a period of more than six months from the date they became payable. (c) According to the information and explanations given to us there are no dues of provident fund, income-tax, wealth tax, service tax and other material statutory dues which have not been deposited by the Company with the appropriate authorities on account of any dispute. x. The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the immediately preceding financial year. xi. xii. xiii. xiv. xv. xvi. xvii. The Company did not have any dues to any financial institutions, banks or debenture holders during the year. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. In our opinion and according to the information and explanations given to us, the Company is not a chit fund / nidhi / mutual benefit fund / society. Accordingly, the provisions of clause 4 (xiii) of the Order are not applicable to the Company. Based on information and explanations provided by the management, in respect of dealing and trading in shares and securities, proper records have been maintained of the transactions and contracts and timely entries have been made therein. The shares and securities have been held by the Company in its own name. According to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks and financial institutions. The Company did not have any term loans outstanding during the year. Accordingly, the provisions of clause 4(xvi) of the Order are not applicable to the Company. According to the information and explanations given to us and based on overall examination of the balance sheet of the Company, the Company has not used any funds raised on short-term basis for long-term investment. xviii. The Company has not made any preferential allotment of shares to companies /firms parties covered in the register maintained under section 301 of the Act.

22 xix. xx. xxi. According to the information and explanations given to us, the Company has not issued any debentures during the year. The Company has not raised any money by public issues during the year. According to the information and explanations given to us, no material frauds on or by the Company has been noticed or reported during the course of our audit. For B S R & Co. LLP Chartered Accountants Firm s Registration No: W Milind Ranade 28 April 2014 Partner Mumbai Membership No:

23 Balance Sheet as at 31 March 2014 (Currency: Indian rupees) Note As at 31 March March 2013 EQUITY AND LIABILITIES Shareholders' Funds Share capital ,700, ,699,900 Reserves and surplus ,178,452,122 12,090,701,835 13,291,152,122 12,205,401,735 Non Current Liabilities Long - term provisions ,506,128 28,240,641 23,506,128 28,240,641 Current Liabilities Trade payables ,429, ,690,676 Other current liabilities ,506, ,207,150 Short - term provisions 3.6 2,053,775,247 1,918,590,737 3,116,710,855 2,768,488,563 TOTAL 16,431,369,105 15,002,130,939 ASSETS Non-current assets Fixed assets Tangible assets ,929, ,101,343 Intangible assets ,574,407 36,502,380 Non - current investments 3.8A 3,240,049,934 3,135,684,150 Deferred tax assets ,922,429 80,740,943 Long - term loans and advances ,067,035,917 7,830,379,125 Other non - current assets ,635,340 34,189,826 4,562,147,638 11,274,597,767 Current assets Current investments 3.8B 4,297,221,801 2,598,116,439 Trade receivables ,515, ,525,379 Cash and bank balance ,598, ,395,136 Short - term loans and advances ,042,156, ,505,997 Other current assets ,729,228 45,990,221 11,869,221,467 3,727,533,172 TOTAL 16,431,369,105 15,002,130,939 As per our report of even date attached For B S R & Co. LLP Chartered Accountants Firm's Registration No W For and on behalf of the Board of Directors of Reliance Capital Asset Management Limited Milind Ranade Soumen Ghosh Kanu Doshi Partner Director Director Membership No Sundeep Sikka Chief Executive Officer Prateek Jain Chief Financial Officer Mumbai, 28 April 2014 Ajay Patel Manager

24 Statement of Profit and Loss for the year ended 31 March 2014 (Currency: Indian rupees) Note For the period ended For the year ended 31 March March 2013 Income Revenue from operations - management fees ,618,042,633 5,899,816,525 Other income ,183,717,598 1,226,924,127 Total revenue 7,801,760,231 7,126,740,652 Expenditure Employee benefits expense ,365,573,911 1,325,231,804 Administrative and other expenses ,530,660,681 1,176,233,865 Marketing and publicity expenses ,073,456 1,403,693,127 Depreciation ,734,396 78,417,643 Diminution in value of long term investments - 6,325,073 Total expenses 3,908,042,444 3,989,901,512 Profit before exceptional items and tax 3,893,717,787 3,136,839,140 Exceptional items (refer note 3.33) ,565, ,411,399 Profit before tax 3,836,152,596 2,580,427,741 Income tax expense Current tax (Net of MAT credit entitlement) (797,000,000) (605,744,875) Reversal of previous year provision (910,196) 3,563,719 MAT credit asset 398,576, ,407,718 MAT credit utilised (398,576,034) (304,407,718) Deferred tax credit 1,181,487 (2,864,663) Profit After Tax 3,039,423,887 1,975,381,922 Basic earning per share of Rs. 10 each Diluted earning per share of Rs. 10 each As per our report of even date attached For B S R & Co. LLP Chartered Accountants Firm's Registration No W For and on behalf of the Board of Directors of Reliance Capital Asset Management Limited Milind Ranade Soumen Ghosh Kanu Doshi Partner Director Director Membership No Sundeep Sikka Chief Executive Officer Prateek Jain Chief Financial Officer Mumbai, 28 April 2014 Ajay Patel Manager

25 Cash Flow Statement for the year ended 31 March 2014 (Currency: Indian rupees) Particulars Particulars For the period ended 31 March 2014 (Audited) For the year ended 31 March 2013 (Audited) A. Cash flow from operating activities Profit before tax as per statement of profit and loss 3,836,152,596 2,580,427,741 Adjusted for Depreciation 71,734,396 78,417,643 Provision for Wealth Tax 15,849 33,075 Dividend Income (216,374,229) (101,902,560) Interest Income (718,264,441) (856,716,649) (Profit) / Loss on sale of Investment (Net) (247,425,475) (267,455,600) Net (gain) or Loss on Foreign Currency Transactions & Translations 2,567,736 1,326,388 Diminution in Value of Investments 57,565, ,736,472 Loss on sale of Fixed Assets 9,905,759 (1,040,275,216) 3,724,855 (579,836,376) Operating Profit before Working Capital changes 2,795,877,380 2,000,591,365 (Increase) / Decrease in Long Term Loans & Advances (218,595,855) (162,446,490) (Increase) / Decrease in Other Non Current Assets (2,445,514) (2,316,200) (Increase) / Decrease in Trade Receivable 34,009,889 (31,549,261) (Increase) / Decrease in Short Term Loans & Advances (214,950,524) (335,119,452) Increase / (Decrease) in Long term provisions (4,734,514) (3,893,136) Increase / (Decrease) in Short term provisions 429,668 (195,838) Increase / (Decrease) in Trade payables 227,738,616 (316,030,810) Increase / (Decrease) in Other Current Liabilities (17,268,570) (195,816,806) 78,373,958 (773,177,229) Cash generated from Operations 2,600,060,574 1,227,414,136 Taxes Paid (804,504,943) (732,770,519) Refund received (including interest) 13,365, ,756,982 Net Cash from Operating Activities 1,808,920, ,400,599 B. Cash Flow from Investing Activities Purchase of Fixed Assets (27,642,026) (82,965,869) Sale of Fixed Assets 3,101,577 2,156,571 Inter Corporate Deposit received 4,500,000, ,000,000 Inter Corporate Deposit given (3,750,000,000) - Loan to ESOP Trust (net of repayment) 26,452,605 (99,695,705) Purchase of Investments (16,931,709,047) (14,027,345,063) Investment in Subsidiaries (67,363,921) (381,102,688) Sale of Investments 15,385,462,099 14,350,800,116 Sale of Investments in Subsidiaries - 38,775,000 Interest Received 607,286, ,895,983 Dividend Received 240,612,979 81,921,272 Net Cash from / (used in) Investing Activities (13,799,050) 1,514,439,617 C. Cash Flow from Financing Activities Redemption of Preference Share Capital (1,999,900) - Dividend paid including DDT (1,886,918,758) (1,874,459,723) Net Cash from / (used in) Financing Activities (1,888,918,658) (1,874,459,723) Net increase/(decrease) in cash and cash Equivalents (A+B+C) (93,796,720) 283,380,493 Opening Balance of Cash and Cash Equivalents 403,395, ,014,643 Closing Balance of Cash and Cash Equivalents 309,598, ,395,136 Cash and cash equivalents comprising of : Cash on Hand 85,775 13,775 Balance with banks in Current Accounts 309,205, ,133,439 Effect of exchange differences on balances with banks in foreign currency 306, ,922 Total 309,598, ,395,136 As per our report of even date attached For B S R & Co. LLP Chartered Accountants Firm's Registration No W For and on behalf of the Board of Directors Reliance Capital Asset Management Limited Milind Ranade Soumen Ghosh Kanu Doshi Partner Director Director Membership No Mumbai, 28 April 2014 Sundeep Sikka Chief Executive Officer Ajay Patel Manager Prateek Jain Chief Financial Officer

26 Significant accounting policies and notes to the accounts for the year ended 31 March Background Reliance Capital Asset Management Limited ( the Company ) was incorporated on 24 February The principal shareholder of the Company as at 31 March 2014 is Reliance Capital Limited. The Company s principal activity is to act as an investment manager to Reliance Mutual Fund ( the Fund ) and to provide Portfolio Management Services ( PMS ) to clients under Securities and Exchange Board of India (SEBI) (Portfolio Managers) Regulations, The Company is registered with SEBI under the SEBI (Mutual Funds) Regulations, The Company manages the investment portfolio of the Fund and provides various administrative services to the Fund as laid down in the Investment Management Agreement dated 12 August Significant accounting policies 2.1 Basis of preparation The accompanying financial statements have been prepared and presented under the historical cost convention on the accrual basis of accounting and comply with the Accounting Standards prescribed by the Companies (Accounting Standards) Rules, The financial statements are presented in Indian Rupees. The accounting policies set out below have been applied consistently to the periods prescribed in the financial statements except otherwise disclosed separately. 2.2 Use of Estimates The preparation of the financial statements, in conformity with generally accepted accounting principles (GAAP), requires management to make estimates and assumptions that affect the reported amount of assets, liabilities and disclosure of contingent liabilities on the date of the financial statements. The estimates and assumptions used in the accompanying financial statements are based upon Management s evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results may differ from the estimates and assumptions used in preparing the accompanying financial statements. Any revision to accounting estimates is recognised prospectively in current and future periods. 2.3 Fixed assets and depreciation Fixed assets are stated at cost of acquisition less accumulated depreciation. Cost includes all expenses incidental to the acquisition of the fixed assets. Depreciation of fixed assets is provided on written down value method in accordance with rates specified in Schedule XIV to the Companies Act, 1956 which are mentioned as under : Leasehold improvements are amortised over the primary period of the lease on straight-line basis or useful life of asset, whichever is lower. Intangible assets comprising of software purchased / developed and licensing costs are amortised over the useful life of the software up to a maximum of three years commencing from the date on which such software is first utilised. Assets individually costing Rs.5000 or less are fully depreciated in the year of purchase/ acquisition. The Company provides pro-rata depreciation from the day the asset is put to use and for any asset sold, till the date of sale. 2.4 Impairment of assets The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash-generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of profit and loss. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciable historical cost. 2.5 Investments Purchase and sale of investments are recorded on trade date. Investments are classified as long term or current based on intention of the management at the time of purchase. Investments that are intended to be held for not more than 1 year from the date on which such investments are made, are classified as current. All other investments are classified as long term investments. Long-term investments are stated at cost of acquisition. Provision for diminution is made to recognise a decline, other than temporary, in the value of investments. Current investments are valued at the lower of cost or net realisable value. The comparison of cost and net realisable value is done separately in respect of each individual investment.

27 Significant accounting policies and notes to the accounts for the year ended 31 March Revenue recognition Revenue is recognised when there is reasonable certainty of its ultimate realisation/collection. Investment Management Fees (net of service tax) Investment Management fees are recognised on an accrual basis in accordance with Investment Management Agreement and SEBI (Mutual Fund) Regulations, 1996 based on average assets under management (AUM) of Reliance Mutual Fund schemes. Portfolio Management Fees (net of service tax) Portfolio Management fees are recognised on an accrual basis in accordance with Portfolio Management Agreement entered with respective clients. Profit or loss on Sale of Investments The gains/ losses on sale of investments are recognised in the statement of profit and loss on the trade day. Profit or loss on sale of investments is determined on weighted average cost basis. Interest income is accounted on a time proportion basis. Dividend income is recognised when the right to receive dividend is established. 2.7 Transactions in foreign currency Foreign currency transactions are recorded at the rates of exchange prevailing on the date of the transaction. Exchange differences, if any arising out of transactions settled during the year are recognised in the statement of profit and loss. Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are translated at the closing exchange rate on that date. The exchange differences, if any, are recognised in the statement of profit and loss and related assets and liabilities are accordingly restated in the balance sheet. 2.8 Employee Benefits Provident Fund The Company expenses its contribution to the statutory provident fund, a defined contribution scheme, made at 12% of the basic salary of each employee. Gratuity The Company s gratuity benefit scheme is a defined benefit plan. The Company s net obligation in respect of the gratuity benefit scheme is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any plan assets, if any, is deducted. The present value of the obligation under such defined benefit plan is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation is measured at the present value of the estimated future cash flows. The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of the obligations. Actuarial gains and losses are recognised immediately in the statement of profit and loss. Benefits in respect of gratuity, a defined benefit scheme, and superannuation, a defined contribution scheme, as applicable to employees of the Company are annually funded with the Reliance Life Insurance Company Limited and Birla Sun Life Insurance Company Limited respectively. Leave Encashment Leave Encashment which is a defined benefit, is accrued based on an actuarial valuation at the balance sheet date carried out by an independent actuary. Compensated absences The employees of the Company are entitled to compensated absence. The employees can carry forward a portion of the unutilized accrued leave balance and utilize it in future periods. The Company records an obligation for compensated absences in the period in which the employee renders the service that increases the entitlement. The Company measures the expected cost of compensated absence as the amount that the Company expects to pay as a result of the unused entitlement that has accumulated at the balance sheet date.

28 Significant accounting policies and notes to the accounts for the year ended 31 March New fund offer expenses of mutual fund and PMS schemes Expenses relating to new fund offer of mutual fund and PMS schemes are charged in the statement of profit and loss in the year in which such expenses are incurred except for closed ended schemes which are recognised over the duration of the scheme Fund expenses Expenses incurred on behalf of schemes of Reliance Mutual Fund are recognised in the statement of profit and loss under marketing and publicity expenses unless considered recoverable from the schemes in accordance with the provisions of SEBI (Mutual Fund) Regulations, Expenses directly incurred for the schemes of Reliance Mutual Fund are charged to the statement of profit and loss under respective heads Operating leases Leases where the lessor effectively retains substantially all the risks and benefits of ownership over the lease term are classified as Operating Leases. Operating lease rentals are recognised as an expense on straight line basis over the lease period Tax Current tax Income tax expense comprises current tax (i.e. amount of tax for the period determined in accordance with the income tax law), deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the year). Provision for income tax is recognised on an annual basis under the taxes payable method, based on estimated tax liability computed after taking credit for allowances and exemption in accordance with Indian Income Tax Act, In case of matters under appeal due to disallowance or otherwise, full provision is made when the said liabilities are accepted by the Company. MAT Credit entitlement is recognised where there is convincing evidence that the same can be realised in future. The company has balance of unrecognised MAT credit of Rs. 195,720,799 (P.Y. Rs. 594,296,833) as at 31 March Deferred tax The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realised in future. However, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only to the extent there is a virtual certainty of realisation of such assets. Deferred tax assets are reviewed as at each balance sheet date and written down or written up to reflect the amount that is reasonable/virtually certain (as the case may be) to be realised Earnings per share The basic earnings per share is computed by dividing the net profit attributable to the equity shareholders by weighted average number of equity shares outstanding during the reporting year. Number of equity shares used in computing diluted earnings per share comprises the weighted average number of shares considered for deriving basic earnings per share and also weighted average number of equity shares which would have been issued on the conversion of all dilutive potential shares. In computing diluted earnings per share only potential equity shares that are dilutive are included Contingencies and provisions The Company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

29 3. Notes to the accounts as at 31 March 2014 (Currency: Indian rupees) 3.1 Share Capital Particulars As at 31 March March 2013 Authorised Equity shares, Rs.10 par value 12,000,000 (12,000,000) equity shares 120,000, ,000,000 Preference shares, Rs.100 par value 350,000 (350,000) preference shares 35,000,000 35,000, ,000, ,000,000 Issued, subscribed and paid up Equity Shares, Rs.10 par value 11,520,000 (11,520,000 shares) equity shares fully paid up 115,200, ,200,000 Less : Amount recoverable from Reliance Capital Asset Management Employee Benefits Trust ("ESOP Trust"), (2,00,000 Equity Shares of Rs.10 each allotted to the Trust during the year ) Less : Amount recoverable from ESOP Trust (50,000 equity shares of Rs.10 each allotted to ESOP Trust during the year ) 2,000,000 2,000, , , ,700, ,700,000 Preference shares, Rs.100 par value NIL (19,999 shares) 1% Non-Cumulative Redeemable Preference shares of Rs.100 each - 1,999,900-1,999,900 Total Share Capital 112,700, ,699,900

30 Notes to the accounts as at 31 March 2014 (Currency: Indian rupees) I. The details of equity shareholders holding more than 5% of equity share capital and shares held by holding company is set out below : As at Name of the shareholder 31 March March 2013 No. of shares % held No. of shares % held Reliance Capital Limited ('Holding Company') 7,514, % 7,514, % Nippon Life Insurance Company 2,995, % 2,995, % II. The reconciliation of the number of shares outstanding and the amount of share capital is set out below: As at Particulars 31 March March 2013 No. of shares Amount No. of shares Amount Equity shares at the beginning 11,520, ,200,000 10,760, ,600,000 Add / (Less): Bonus shares issued during the year ,000 7,600,000 Equity shares at the end 11,520, ,200,000 11,520, ,200,000 Particulars As at 31 March March 2013 No. of shares Amount No. of shares Amount Preference shares at the beginning 19,999 1,999,900 19,999 1,999,900 Add / (Less): movement during the year (19,999) (1,999,900) - - Preference shares at the end ,999 1,999,900 III. The details of preference shareholders holding more than 5% of preference share capital is set out below : As at Name of the shareholder 31 March March 2013 No. of shares % held No. of shares % held Reliance Securities Limited - - 1, % Reliance CWT India Limited - - 1, % Emerging Money Mall Limited , % Terms / rights attached to equity shares : The Company has one class of equity shares having a par value of Rs.10 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after the distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. IV. Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date 1. 19,999 1% Non-Cumulative Redeemable Preference shares of Rs.100 each have been redeemed in the current financial year as per the terms of the agreement at the face value ,000 fully paid equity shares of Rs. 10 each have been allotted as bonus shares by capitalisation of capital redemption reserve on 9 May 2012.

31 Notes to the accounts as at 31 March 2014 (Currency: Indian rupees) Particulars As at 31 March March Reserves and surplus Securities premium account Opening Balance 5,552,850,300 5,552,850,300 Add: received during the year - - 5,552,850,300 5,552,850,300 Less : Amount recoverable from ESOP Trust (2,00,000 equity shares of Rs.10 each allotted to ESOP Trust during the year ) Less : Amount recoverable from ESOP Trust (50,000 equity shares of Rs.10 each allotted to ESOP Trust during the year ) 256,160, ,160, ,490, ,490,000 Balance at the end of the year 5,182,200,300 5,112,200,300 Capital redemption reserve Balance at the beginning of the year 2,407,000 10,007,000 Less : Amount utilised towards issue of fully paid equity shares - 7,600,000 Add: Amount transferred from General Reserve for redemption of preference shares 1,999,900 - Balance at the end of the year 4,406,900 2,407,000 General reserve Balance at the beginning of the year 734,920, ,382,400 Add: Amount transferred from surplus 303,942, ,538,192 Less: Amount transferred to Capital Redemption Reserve for redemption of preference shares 1,999,900 - Balance at the end of the year 1,036,863, ,920,592 Surplus Balance at the beginning of the year 6,241,173,943 6,350,248,970 Add : Profit after tax for the year 3,039,423,887 1,975,381,922 Profit available for appropriations 9,280,597,830 8,325,630,893 Proposed dividend on equity shares (1,728,000,000) (1,612,800,000) Proposed dividend on preference share - (19,999) Tax on proposed dividend (293,673,600) (274,098,758) Transfer to general reserve (303,942,389) (197,538,192) Balance at the end of the year 6,954,981,841 6,241,173,943 Total Reserves and surplus 13,178,452,122 12,090,701,835

32 Notes to the accounts as at 31 March 2014 (Currency: Indian rupees) Particulars As at 31 March March Long - term Provisions Provision for Employee benefits: Provision for leave encashment 23,506,128 28,240,641 23,506,128 28,240, Trade Payables Trade payables* 730,429, ,690, ,429, ,690, Other current liabilities Statutory liabilities 29,867,851 62,045,072 Outstanding liabilities against expenses* 302,638, ,162, ,506, ,207,150 (*) The Company does not have any outstanding dues towards small scale industrial undertakings as at 31 March The Company did not have any outstanding dues to any micro or small enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006 at any point during the year that were outstanding for a period of more than 45 days from the date of acceptance (as certified by Management). 3.6 Short - term Provisions Provision for Employees' benefit: Provision for leave encashment 635,073 45,090 Provision for compensated absence cost 26,084,400 26,244,715 Proposed Dividend on equity shares (including DDT thereon) 2,021,673,600 1,886,895,360 Proposed Dividend on preference shares (including DDT thereon) - 23,398 Provision for income tax (net of advance tax Rs. 851,945,284 (Previous year Rs. 851,945,284)) 5,382,174 5,382,174 2,053,775,247 1,918,590,736

33 Notes to the accounts as at 31 March 2014 (Currency: Indian rupees) 3.7 Fixed Assets As at 31 March 2014 Gross Block (At Cost) Depreciation Net Block Assets As at Additions Deductions As at Up to During the Deductions Up to As at Year Tangible assets Computer 180,954,126 11,411,946 16,105, ,260, ,859,571 20,561,770 14,409, ,011,470 35,249,400 Vehicle 15,028,988-3,594,172 11,434,816 8,721,465 1,627,061 3,365,912 6,982,614 4,452,202 Office Equipment 133,938,120 1,340,167 19,909, ,368,654 76,063,614 8,080,692 13,253,579 70,890,727 44,477,927 Furniture 56,127, ,905 9,384,684 46,895,411 42,044,281 2,445,995 7,005,610 37,484,666 9,410,745 Leasehold Improvements 236,184,469 7,189,803 71,461, ,912, ,442,619 20,543,698 69,412, ,573,458 17,339,337 Sub Total 622,232,892 20,094, ,455, ,872, ,131,550 53,259, ,447, ,942, ,929,611 Intangible assets Software 67,935,509 7,547,207-75,482,716 31,433,129 18,475,180-49,908,308 25,574,407 Sub Total 67,935,509 7,547,207-75,482,716 31,433,129 18,475,180-49,908,308 25,574,407 Grand Total 690,168,402 27,642, ,455, ,355, ,564,679 71,734, ,447, ,851, ,504,018 As at 31 March 2013 Gross Block (At Cost) Depreciation Net Block Assets As at As at Up to During the Up to As at Additions Deductions Deductions Year Tangible assets Computer 156,732,679 24,852, , ,954, ,400,648 19,853, , ,859,571 46,094,555 Vehicle 16,092,804-1,063,816 15,028,988 7,412,815 2,230, ,053 8,721,465 6,307,523 Office Equipment 138,829,584 2,138,976 7,030, ,938,120 70,382,825 9,496,791 3,816,002 76,063,614 57,874,506 Furniture 60,110, ,624 4,756,498 56,127,190 42,142,278 3,459,473 3,557,470 42,044,281 14,082,909 Leasehold Improvements 260,205,113 17,371,546 41,392, ,184, ,351,612 31,394,022 40,303, ,442,619 32,741,850 Sub Total 631,970,243 45,136,883 54,874, ,232, ,690,177 66,434,180 48,992, ,131, ,101,343 Intangible assets Software 30,106,523 37,828,986-67,935,509 19,449,667 11,983,463-31,433,129 36,502,380 Sub Total 30,106,523 37,828,986-67,935,509 19,449,667 11,983,463-31,433,129 36,502,380 Grand Total 662,076,767 82,965,869 54,874, ,168, ,139,845 78,417,643 48,992, ,564, ,603,723

34 Notes to the accounts as at 31 March 2014 (Currency: Indian rupees) Particulars Quantity Cost / Fair Value Quantity Cost / Fair Value Face As at As at As at As at Value A Non - current investments A. Trade Investment (Valued at Cost unless stated otherwise) Unquoted Equity Instruments : (I) Investment in subsidiaries (Unquoted, fully paid up) Reliance Asset Management (Mauritius) Limited USD ,000 87,662, ,000 87,662,225 Reliance Asset Management Singapore Pte Limited SGD 1 5,742, ,189,388 3,896, ,938,224 Reliance Asset Management (U.K) PLC GBP 1 3,240, ,310,980 3,240, ,310,980 Reliance Asset Management (Malaysia) SDN. BHD. RM 1 15,816, ,369,332 15,816, ,356,575 Reliance Capital Pension Fund Limited INR 10 21,250, ,500,000 21,250, ,500,000 Reliance AIF Management Company Ltd. INR ,000 5,100, ,145,131,925 1,077,768,004 Less: Provision for diminution in value of investments 613,976, ,411, ,155, ,356,605 B. Non - Trade investment (valued at cost less provision for diminution) (I) Investments in equity shares (Quoted) Reliance Industries Limited INR 10 49,964 34,254,771 49,964 34,254,771 Reliance Communications Limited INR 5 24,923 10,518,365 24,923 10,518,365 ICICI Bank Limited INR 10 4,150 5,005,234 4,150 5,005,234 Kotak Mahindra Bank Limited INR 5 9,240 5,004,125 9,240 5,004,125 54,782,496 54,782,496 Less: Provision for Diminution in Value of Investments 8,414,692 8,414,692 46,367,804 46,367,804 (II) A. Investments in mutual fund (Unquoted) Reliance Growth Fund- Retail plan - Dividend Plan INR 10 1,478,358 67,500,000 1,478,358 67,500,000 Reliance Growth Fund- Institutional plan - Dividend Plan INR , ,000, , ,000,000 Reliance Vision Fund - Retail Plan -Dividend Plan INR 10 2,401, ,000,000 2,401, ,000,000 Reliance Vision Fund - Direct -Growth Option INR 10 83,008 18,575, Reliance Tax Saver (ELSS) Fund -Growth Option INR ,200,000 22,000,000 Reliance Focused Large Cap Fund -Retail Plan- Growth Plan INR 10 29, ,871 29, ,871 Reliance Focused Large Cap Fund - Direct - Growth Plan INR 10 3,184,592 50,000, Reliance Equity Opportunities Fund-Retail Plan- Growth Option INR ,445 9,304,450 Reliance Equity Opportunities Fund - Direct - Growth Option INR 10 1,214,903 50,000, Reliance Equity Opportunities Fund-Institutional Plan- Dividend Plan INR 10 2,838, ,000,000 2,838, ,000,000 Reliance Top 200 Fund- Growth Plan - Growth Plan INR ,889,976 50,000,000 Reliance Top 200 Fund- Direct - Growth Plan INR 10 3,606,879 50,000, Reliance Natural Resource Fund - Growth Plan - Growth Option INR ,268,542 22,685,420 Reliance Infrastructure Fund - Institutional Plan - Growth Option INR ,500,000 75,000,000 Reliance Small Cap Fund - Dividend Option INR ,000, ,000,000 Reliance Small Cap Fund - Direct - Growth Plan INR 10 9,945, ,496, Reliance Regular Savings Fund - Equity Plan - Dividend Plan INR 10 4,188, ,000,000 4,188, ,000,000 Reliance Banking Fund - Direct - Growth Plan INR 10 85,181 10,000, Reliance Long Term Equity Fund - Direct - Growth Plan INR ,518 10,000, Reliance Media & Entertainment Fund - Direct - Growth Plan INR ,238 10,000, Reliance Pharma Fund - Direct - Growth Plan INR ,726 10,000, Reliance Diversified Power Sector Fund - Direct - Growth Plan INR ,632 10,000, Reliance Regular Savings Fund - Balanced Plan - Growth Plan INR ,766 10,000, Reliance Dual Advantage Fixed Tenure Fund I - Plan K-Growth Plan INR 10 5,000,000 50,000,000 5,000,000 50,000, ,870, ,788,741 (II) B. Investments in mutual fund (Quoted) R* Shares CNX 100 Fund - Dividend Plan INR ,723 20,000, ,723 20,000,000 Reliance Close Ended Equity Fund - Series A - Direct - Dividend Plan INR 10 10,000, ,000, Reliance Gold savings Fund-Growth Plan INR ,000,000 50,000,000 Reliance Gold savings Fund - Direct - Growth Plan INR 10 4,764,498 70,000, Reliance Fixed Horizon Fund - XXII Series 32 - Dividend Plan INR 10 5,000,000 50,000,000 5,000,000 50,000,000 Reliance Fixed Horizon Fund - XXII Series 34 - Dividend Plan INR 10 6,250,000 62,500,000 6,250,000 62,500,000 Reliance Fixed Horizon Fund - XXII Series 21 - Growth Plan INR ,000,000 50,000,000 Reliance Fixed Horizon Fund - XXII Series 28 - Growth Plan INR ,000,000 50,000,000 Reliance Fixed Horizon Fund - XXII Series 38 - Direct - Growth Plan INR ,000,000 50,000,000 Reliance Fixed Horizon Fund - XXII Series 39 - Direct - Growth Plan INR ,000, ,000,000 Reliance Fixed Horizon Fund - XXIII Series 1 - Dividend Plan INR ,000, ,000,000 Reliance Fixed Horizon Fund - XXIII Series 3 - Direct - Growth Plan INR ,000, ,000,000 Reliance Fixed Horizon Fund - XXIII Series 9 - Direct - Growth Plan INR ,000, ,000,000 Reliance Fixed Horizon Fund - XXV Series 12 - Direct - Growth Plan INR 10 5,000,000 50,000, Reliance Fixed Horizon Fund - XXV Series 19 - Direct - Growth Plan INR 10 10,000, ,000, Reliance Fixed Horizon Fund - XXV Series 21 - Direct - Growth Plan INR 10 3,000,000 30,000, Reliance Fixed Horizon Fund - XXV Series 22 - Direct - Growth Plan INR 10 5,500,000 55,000, Reliance Fixed Horizon Fund - XXV Series 35 - Direct - Growth Plan INR 10 1,200,000 12,000, ,500, ,500,000 (III) Investments in debentures or bonds (Quoted) 6.72% IRFC Tax Free Bonds 20-Dec-2020 INR , ,000,000 2, ,000, % National Highways Authority Of India Bonds 25-Jan-2027 INR ,809 61,809,000 61,809 61,809, % PFC Tax Free Bonds 01-Feb-2027 INR , ,748, , ,748, % NTPC Tax Free Bonds 16-Dec-2033 INR ,995 94,995, % NHB Tax Free Bonds 13-Jan-2034 INR , ,490, % NHAI Tax Free Bonds 05-Feb-2029 INR , ,000, ,110,042, ,557,400 (IV) Investment in Preference Shares (Unquoted, Fully Paid Up) L&T Finance Holdings Limited % Cumulative Preference Shares INR 100 1,141, ,113,600 1,141, ,113, ,113, ,113,600 Total Non Current Investment 3,240,049,934 3,135,684,150 Notes: 1. Quoted investments Aggregate of Book value 1,705,910,204 1,673,425,204 Aggregate of Market value 1,726,455,422 1,710,084, Unquoted investments Aggregate of Book value 1,534,139,730 1,462,258, Provision for diminution in value of investments 622,391, ,826,091

35 Notes to the accounts as at 31 March 2014 (Currency: Indian rupees) 3.8B Current investments Particulars Quantity Cost / Fair Value Quantity Cost / Fair Value Face As at As at As at As at Value A. Current Portion of Long Term Investment (Quoted) at cost (I) Investment in Mutual Fund (Quoted) Reliance Fixed Horizon Fund - XXII Series 21 - Growth Plan INR 10 5,000,000 50,000, Reliance Fixed Horizon Fund - XXII Series 28 - Growth Plan INR 10 5,000,000 50,000, Reliance Fixed Horizon Fund - XXII Series 38 - Direct - Growth Plan INR 10 5,000,000 50,000, Reliance Fixed Horizon Fund - XXII Series 39 - Direct - Growth Plan INR 10 30,000, ,000, Reliance Fixed Horizon Fund - XXIII Series 1 - Dividend Plan INR 10 16,000, ,000, Reliance Fixed Horizon Fund - XXIII Series 3 - Direct - Growth Plan INR 10 10,000, ,000, Reliance Fixed Horizon Fund - XXIII Series 9 - Direct - Growth Plan INR 10 10,000, ,000, ,000,000 - B. Current investments (At cost or market value whichever is less) (I) Investment in Mutual Fund (Unquoted) Reliance Liquid Fund - Treasury Plan - Direct - Growth Option INR , ,137,046 Reliance Liquidity Fund - Direct - Growth Option INR , ,499, Reliance Medium Term Fund - Direct - Growth INR 10 12,824, ,000, Reliance Short Term Fund - Growth Plan - Growth Option INR 10 23,346, ,241,555 42,026, ,479,393 Reliance Income Fund - Growth Plan - Growth Option INR 10 5,279, ,000,000 5,279, ,000,000 Reliance Dynamic Bond Fund - Direct Plan - Growth Plan INR 10 74,192,960 1,207,480,676 19,118, ,000,000 2,532,221,801 1,845,616,439 (II) Investment in mutual fund (Quoted) Reliance Fixed Horizon Fund - XXV Series 32 - Direct - Growth Plan INR 10 10,000, ,000, Reliance Fixed Horizon Fund - XXI Series 21 - Dividend Plan INR ,000,000 50,000,000 Reliance Fixed Horizon Fund - XXII Series 15 - Growth Plan INR ,000, ,000,000 Reliance Fixed Horizon Fund - XXII Series 17 - Growth Plan INR ,000,000 30,000,000 Reliance Fixed Horizon Fund - XXII Series 36 - Growth Plan INR ,250,000 72,500,000 Reliance Interval Fund - Quarterly Plan - Series I-Growth Plan INR Reliance Yearly Interval Fund - Series 1 - Direct Plan - Growth Plan INR 10 18,380, ,000,000 30,000, ,000,000 Reliance Yearly Interval Fund - Series 2 - Direct Plan - Growth Plan INR 10 9,164, ,000,000 10,000, ,000,000 Reliance Yearly Interval Fund - Series 3 - Direct Plan - Growth Plan INR 10 10,000, ,000,000 10,000, ,000,000 Reliance Yearly Interval Fund - Series 7 - Direct Plan - Growth Plan INR 10 4,000,000 40,000, Reliance Yearly Interval Fund - Series 9 - Direct Plan - Growth Plan INR 10 7,500, ,000, Reliance Annual Interval Fund - Series I - Direct Plan - Growth Plan INR 10 8,248, ,000, Reliance Interval Fund - II - Series 4 - Direct Plan - Growth Plan INR 10 12,000, ,000, Reliance Interval Fund - I - Half Yearly Interval Fund - Series 2 - Direct Plan - Growth Plan INR 10 1,906,378 20,000, Reliance Monthly Interval Fund - Series I - Direct Plan - Growth Plan INR 10 5,861, ,000, ,000, ,500,000 Total Current Investment 4,297,221,801 2,598,116,439 Notes: 1. Quoted investments Aggregate of Book value 1,765,000, ,500,000 Aggregate of Market value 1,887,996, ,456, Unquoted investments Aggregate of Book value 2,532,221,801 1,845,616,439

36 Notes to the accounts as at 31 March 2014 (Currency: Indian rupees) Particulars As at 31 March March Deferred tax assets Deferred tax asset arising on account of timing differences in: Depreciation on fixed assets 50,671,754 43,507,914 Employee compensation 17,071,681 18,534,898 Straightlining of lease rentals 14,178,994 18,698,131 81,922,429 80,740, Long - term loans and advances Loans and advances to related parties (Unsecured, considered good) - - Intercorporate deposits to related parties - 7,000,000,000 Parties other than related parties (Unsecured, considered good) Capital advances 5,445,497 1,532,919 Loan to ESOP trust 250,543, ,995,705 Loans to employees 2,200,000 2,050,000 Security deposits 137,447, ,855,168 Advances recoverable in cash or in kind or for value to be received 2,111,987 42,310,833 Prepaid expenses 522,770, ,630,486 Advance tax paid 146,517, ,004,014 (net of provision of income tax Rs. 1,419,350,432 (Previous year Rs. 2,102,308,846 )) 1,067,035,917 7,830,379, Other non - current assets Other bank balances Fixed Deposits with residual maturity of more than 12 months (including accrued interest) 36,635,340 34,189,826 36,635,340 34,189,826 The above deposits have been liened for business purpose (Refer Note 3.24) 36,635,340 34,189, Trade receivables Unsecured, Considered Good Outstanding for more than six months - - Others 87,515, ,525,379 87,515, ,525, Cash and bank balance Cash and cash equivalents Cash on hand 85,775 13,775 Balance with banks in current accounts 309,512, ,381, ,598, ,395, Short - term loans and advances Loans and advances to related parties (Unsecured, considered good) 10,775, ,508 Intercorporate deposits to related parties 4,500,000,000 - Parties other than related parties (Unsecured, considered good) Intercorporate deposits 1,750,000,000 - Loans to Employees 8,620,890 11,573,550 Prepaid Expenses 506,514, ,542,601 Service Tax Credit-Unutilised 160,480,662 23,862,759 Advances recoverable in cash or in kind or for value to be received 105,764, ,185,579 7,042,156, ,505, Other current assets Dividend receivable - 24,238,750 Fixed Deposits with residual maturity of less than 12 months (including accrued interest) 126,338 - Interest accrued on bonds 132,602,890 21,751, ,729,228 45,990,221 The above deposits have been liened for business purpose (Refer Note 3.24) 126,338